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Monday, September 12, 2022

Tuesday: CPI

by Calculated Risk on 9/12/2022 08:44:00 PM

Mortgage Rates From Matthew Graham at Mortgage News Daily: Rates Edge Up; Deep Dive on Mortgages vs 10yr Treasury and Fed Funds Rate

Mortgage rates moved slightly higher today, but only after moving slightly lower earlier this morning. [30 year fixed 5.98%]
emphasis added
Tuesday:
• At 6:00 AM ET, NFIB Small Business Optimism Index for August.

• At 8:30 AM, The Consumer Price Index for August from the BLS. The consensus is for a 0.1% decrease in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 8.1% year-over-year and core CPI to be up 6.1% YoY.

On COVID (focus on hospitalizations and deaths):

COVID Metrics
 NowWeek
Ago
Goal
New Cases per Day260,18583,434≤5,0001
Hospitalized226,14530,503≤3,0001
Deaths per Day2328394≤501
1my goals to stop daily posts,
27-day average for Cases, Currently Hospitalized, and Deaths
🚩 Increasing 7-day average week-over-week for Cases, Hospitalized, and Deaths
✅ Goal met.

COVID-19 Deaths per DayClick on graph for larger image.

This graph shows the daily (columns) and 7-day average (line) of deaths reported.

Average daily deaths bottomed in July 2021 at 214 per day.

Second Home Market: South Lake Tahoe in August

by Calculated Risk on 9/12/2022 02:52:00 PM

With the pandemic, there was a surge in 2nd home buying.

I'm looking at data for some second home markets - and I'm tracking those markets to see if there is an impact from lending changes, rising mortgage rates or the easing of the pandemic.

This graph is for South Lake Tahoe since 2004 through August 2022, and shows inventory (blue), and the year-over-year (YoY) change in the median price (12-month average).

Note: The median price is distorted by the mix, but this is the available data.

South Lake Tahoe Click on graph for larger image.

Following the housing bubble, prices declined for several years in South Lake Tahoe, with the median price falling about 50% from the bubble peak.

Currently inventory is still very low, but up 5-fold from the record low set in February 2022, and up 44% year-over-year.  Prices are up 3.8% YoY (and the YoY change has been trending down).


It is possible that the YoY change will turn negative soon - even with inventory at historically fairly low levels.

Mortgage Equity Withdrawal Still Strong in Q2; Homeowners now relying on Home Equity lines to extract equity

by Calculated Risk on 9/12/2022 12:26:00 PM

Today, in the Real Estate Newsletter: Mortgage Equity Withdrawal Still Strong in Q2

Excerpt:

Here is the quarterly increase in mortgage debt from the Federal Reserve’s Financial Accounts of the United States - Z.1 (sometimes called the Flow of Funds report) released on Friday. In the mid ‘00s, there was a large increase in mortgage debt associated with the housing bubble.

Mortgage Equity WithdrawalIn Q2 2022, mortgage debt increased $263 billion, the most since 2006. Note the almost 7 years of declining mortgage debt as distressed sales (foreclosures and short sales) wiped out a significant amount of debt.

However, some of this debt is being used to increase the housing stock (purchase new homes), so this isn’t all Mortgage Equity Withdrawal (MEW).
There is much more in the article. You can subscribe at https://calculatedrisk.substack.com/ (All ad free, most content free).

Housing September 12th Update: Inventory Decreased 1.0% Last Week

by Calculated Risk on 9/12/2022 10:20:00 AM

Active inventory decreased 1.0% last week.  Here are the same week inventory changes for the last four years (the increase in 2019 was a one-week surge):


2022: -5.4K
2021: -6.2K
2020: -5.0K
2019: +7.2K

Inventory bottomed seasonally at the beginning of March 2022 and is now up 127% since then.  More than double!  Altos reports inventory is up 26.9% year-over-year. 

Altos Home Inventory Click on graph for larger image.

This inventory graph is courtesy of Altos Research.

As of September 9th, inventory was at 547 thousand (7-day average), compared to 553 thousand the prior week.  Inventory was down 1.0% from the previous week. 

Inventory is still historically low. Compared to the same week in 2021, inventory is up 26.9% from 431 thousand, however compared to the same week in 2020 inventory is down 5.5% from 579 thousand.  Compared to 3 years ago, inventory is down 43.2% from 964 thousand.

Here are the inventory milestones I’m watching for with the Altos data:

1. The seasonal bottom (happened on March 4th for Altos) ✅

2. Inventory up year-over-year (happened on May 13th for Altos) ✅

3. Inventory up compared to two years ago (currently down 5.5% according to Altos)

4. Inventory up compared to 2019 (currently down 43.2%).

Altos Home Inventory
Here is a graph of the inventory change vs 2021, 2020 (milestone 3 above) and 2019 (milestone 4).

The blue line is the year-over-year data, the red line is compared to two years ago, and dashed purple is compared to 2019.

Two years ago (in 2020) inventory was declining all year, so the two-year comparison will get easier all year.  

Based on the recent changes in inventory, my current estimate is inventory will be up compared to 2020 in Q4 of this year.

A key will be if inventory increases this month - so far inventory has decreased.

Mike Simonsen discusses this data regularly on Youtube.

Four High Frequency Indicators for the Economy

by Calculated Risk on 9/12/2022 08:30:00 AM

These indicators are mostly for travel and entertainment.    It is interesting to watch these sectors recover as the pandemic subsides.  Notes: I've added back gasoline supplied to see if there is an impact from higher gasoline prices.


----- Airlines: Transportation Security Administration -----

The TSA is providing daily travel numbers.

This data is as of September 11th.

TSA Traveler Data Click on graph for larger image.

This data shows the 7-day average of daily total traveler throughput from the TSA for 2019 (Light Blue), 2020 (Black), 2021 (Blue) and 2022 (Red).

The dashed line is the percent of 2019 for the seven-day average.

The 7-day average is down 4.9% from the same day in 2019 (90.9% of 2019).  (Dashed line) 

Air travel - as a percent of 2019 - had been moving sideways over the last several months, off about 10% from 2019.   Travel has picked up recently, compared to 2019, perhaps due to the timing of Labor Day.

----- Movie Tickets: Box Office Mojo -----

Move Box OfficeThis data shows domestic box office for each week and the median for the years 2016 through 2019 (dashed light blue).  

Black is 2020, Blue is 2021 and Red is 2022.  

The data is from BoxOfficeMojo through September 8th.

Note that the data is usually noisy week-to-week and depends on when blockbusters are released.  

Movie ticket sales were at $82 million last week, down about 44% from the median for the week.

----- Hotel Occupancy: STR -----

Hotel Occupancy RateThis graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021. Dashed purple is 2019 (STR is comparing to a strong year for hotels).

This data is through Sept 3rd. The occupancy rate was up 3.1% compared to the same week in 2019. This was the first week, since the onset of the pandemic, with the occupancy higher than the comparable week in 2019.

The 4-week average of the occupancy rate is above the median rate for the previous 20 years (Blue).

Notes: Y-axis doesn't start at zero to better show the seasonal change.

----- Gasoline Supplied: Energy Information Administration -----

gasoline Consumption
This graph, based on weekly data from the U.S. Energy Information Administration (EIA), shows gasoline supplied compared to the same week of 2019.

Blue is for 2020.  Purple is for 2021, and Red is for 2022.

As of September 2nd, gasoline supplied was down 7.9% compared to the same week in 2019.

Recently gasoline supplied has been running below 2019 and 2021 levels - and sometimes below 2020.

Sunday, September 11, 2022

Sunday Night Futures

by Calculated Risk on 9/11/2022 07:27:00 PM

Weekend:
Schedule for Week of September 11, 2022

Monday:
• No major economic releases scheduled.

From CNBC: Pre-Market Data and Bloomberg futures S&P 500 are up 12 and DOW futures are up 79 (fair value).

Oil prices were down over the last week with WTI futures at $86.45 per barrel and Brent at $92.61 per barrel. A year ago, WTI was at $70, and Brent was at $73 - so WTI oil prices are up 23% year-over-year.

Here is a graph from Gasbuddy.com for nationwide gasoline prices. Nationally prices are at $3.67 per gallon. A year ago, prices were at $3.15 per gallon, so gasoline prices are up $0.52 per gallon year-over-year.

Hotels: Occupancy Rate UP 3.1% Compared to Same Week in 2019

by Calculated Risk on 9/11/2022 08:11:00 AM

Note: This is the first week, since the onset of the pandemic, with the occupancy higher than the comparable week in 2019.

U.S. hotel performance dipped from the previous week but continued to improve in comparison with 2019, according to STR‘s latest data through Sept. 3.

Aug. 28 through Sept. 3, 2022 (percentage change from comparable week in 2019*):

Occupancy: 62.8% (+3.1%)
• Average daily rate (ADR): $147.14 (+20.9%)
• Revenue per available room (RevPAR): $92.45 (+24.6%)

*Due to the pandemic impact, STR is measuring recovery against comparable time periods from 2019.
emphasis added
The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average.

Hotel Occupancy RateClick on graph for larger image.

The red line is for 2022, black is 2020, blue is the median, and dashed light blue is for 2021.  Dashed purple is 2019 (STR is comparing to a strong year for hotels).

The 4-week average of the occupancy rate is above the median rate for the previous 20 years (Blue).

Note: Y-axis doesn't start at zero to better show the seasonal change.

The 4-week average of the occupancy rate will increase during the Fall business travel period, and then decline in to the Winter.

Saturday, September 10, 2022

Real Estate Newsletter Articles this Week

by Calculated Risk on 9/10/2022 02:11:00 PM

At the Calculated Risk Real Estate Newsletter this week:

1st Look at Local Housing Markets in August

Homebuilder Comments in August: Increased Incentives Helping Sales

Black Knight Mortgage Monitor: "Total market leverage was just 42% of mortgaged homes’ values, the lowest on record"

Lawler: Are “National” Home Prices Already Falling?

The Sharp Slowdown in Year-over-year House Price Growth


This is usually published 4 to 6 times a week and provides more in-depth analysis of the housing market.

You can subscribe at https://calculatedrisk.substack.com/

Most content is available for free (and no Ads), but please subscribe!

Schedule for Week of September 11, 2022

by Calculated Risk on 9/10/2022 08:11:00 AM

The key economic reports this week are August Consumer Price Index (CPI) and Retail Sales.

For manufacturing, August Industrial Production, and the September New York and Philly Fed surveys, will be released this week.

----- Monday, Sept 12th -----

No major economic releases scheduled.

----- Tuesday, Sept 13th -----

6:00 AM: NFIB Small Business Optimism Index for August.

8:30 AM: The Consumer Price Index for August from the BLS. The consensus is for a 0.1% decrease in CPI, and a 0.3% increase in core CPI.  The consensus is for CPI to be up 8.1% year-over-year and core CPI to be up 6.1% YoY.

----- Wednesday, Sept 14th -----

7:00 AM ET: The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

8:30 AM: The Producer Price Index for August from the BLS. The consensus is for a 0.1% decrease in PPI, and a 0.3% increase in core PPI.

----- Thursday, Sept 15th -----

8:30 AM: The initial weekly unemployment claims report will be released.  The consensus is for an increase to 225 thousand from 222 thousand last week.

Retail Sales 8:30 AM ET: Retail sales for August will be released.  The consensus is for a 0.2% increase in retail sales.

This graph shows retail sales since 1992. This is monthly retail sales and food service, seasonally adjusted (total and ex-gasoline).

8:30 AM: the Philly Fed manufacturing survey for September. The consensus is for a reading of 3.5, down from 6.2.

8:30 AM ET: The New York Fed Empire State manufacturing survey for September. The consensus is for a reading of -13.9, up from -31.3.

Industrial Production 9:15 AM: The Fed will release Industrial Production and Capacity Utilization for August.

This graph shows industrial production since 1967.

The consensus is for a 0.2% increase in Industrial Production, and for Capacity Utilization to increase to 80.3%.

----- Friday, Sept 16th -----

10:00 AM: State Employment and Unemployment (Monthly) for August 2022

0:00 AM: University of Michigan's Consumer sentiment index (Preliminary for September).

Friday, September 09, 2022

COVID Sept 9, 2022, Update on Cases, Hospitalizations and Deaths

by Calculated Risk on 9/09/2022 08:58:00 PM

On COVID (focus on hospitalizations and deaths):


COVID Metrics
 NowWeek
Ago
Goal
New Cases per Day267,40085,866≤5,0001
Hospitalized228,99931,368≤3,0001
Deaths per Day2318435≤501
1my goals to stop daily posts,
27-day average for Cases, Currently Hospitalized, and Deaths
🚩 Increasing 7-day average week-over-week for Cases, Hospitalized, and Deaths
✅ Goal met.

COVID-19 Deaths per DayClick on graph for larger image.

This graph shows the daily (columns) and 7-day average (line) of deaths reported.

Average daily deaths bottomed in July 2021 at 214 per day.